Flood Insurance – 10 Facts You Have to Know
Every year, no less than 75,000 Americans now flee their homes due to floods. Whether or not this is mankind’s fault, one thing is for certain: flood insurance can protect you.
Here are 10 facts about flood insurance that you need to know:
Floods can happen anywhere.
People often think flood insurance is only needed in flood zones or in areas that are in close proximity to bodies of water. Truth is, anywhere it rains or snows, or any place with malfunctioning or inadequate drainage infrastructure, is not safe.
Flood insurance is available everywhere.
People usually think that flood insurance is only available in areas that are frequently flooded. They need to know that no matter their location, there are many offline and online insurance providers that can offer protection.
Your homeowner’s policy does not cover floods.
As a non-renter who is still paying down a mortgage, you probably have homeowner’s insurance as your lender’s requirement. But because this type of policy will not protect you against floods, you’ll have to buy a separate one.
Flood insurance is among the most affordable types of policies around. For example, to protect a property with a value of $60,000 to $70,000, you’ll probably only spend $500 a year.
Low-risk means discounts.
If you own a home in a low-risk area, you could be paying jus a couple hundred dollars a year, or not even a hundred if you’re renting.
Like most insurance policies, there will be a waiting period.
In most cases, a flood policy will have about a 30-day waiting period before protection is provided. This is a way for insurers’ to protect themselves from those who might apply for coverage when floods become imminent.
Businesses can get flood insurance too.
If you’re a business owner with expensive assets housed in a non-residential building, flood insurance can offer you protection for these. Safeguarding such assets can mean coverage worth up to a million dollars.
Flood insurance is required in certain areas.
If you live in a flood-prone area in a financed a property, you may have to purchase flood insurance as a requirement of your lender. The reason is to protect such property in which they have equity.
Flood insurance is highly flexible.
Flood insurance has no fixed rate and can instead be purchased based on the value of the assets you want to protect. Larger value means larger premium.
Federal disaster relief is hardly sufficient – if at all given.
Finally, disaster relief during floods may be provided by the federal government, but note that this is only when the president has declared the situation a federal disaster. Unluckily, such a declaration happens only 10% of the time, so most people affected will have to seek relief on their own.
Floods are a real threat to life and property, so getting protection is always worth the cost. Policies and insurers are not all the same, however, so take time to study your options before finally selecting one.